Foreign investment into Israel continues to soar

Israel’s FDI total for the first half of 2018 is impressive, with most investment continuing to come from the US.

Following record highs in 2017, FDI into Israel has continued to skyrocket, with 30 greenfield projects garnered in the first quarter of 2018. This surpasses the number of projects received annually between 2014 and 2016, according to fDi Markets.

In 2017, foreign investment into Israel reached its peak since 2009, in terms of capital, and its highest since 2003 in terms of project numbers (68) and job creation (10,365), found fDi Markets.

These numbers can be partially explained by several mega-projects in the tech and manufacturing sphere, such as Intel’s $720m headquarter expansion and new chip manufacturing plant, which created 4840 jobs in total. Amazon also expanded its presence in the country with a $202m investment that created 2000 jobs.

Israel is well on its way to repeating this stellar performance in terms of FDI project numbers: the 30 developments already agreed in 2018 are worth a total of $1.1bn. For example, Velta Titanium is a building a $450m titanium dioxide production plant at Mishor Rotem technopark.

Israel’s minister of economy and industry, Eli Cohen, said 2017’s FDI high can be explained by “the surge in demand for innovation and Israel’s unique innovation ecosystem and ability to support this demand”.

He added: “‘Innovation ecosystem’ is an overused concept today, but Israel is one of the prime examples of this concept. Nowadays, many people know Israel as ‘the start-up nation’, and as a location for ground-breaking R&D. This is certainly true, but there is also another, lesser-known story: the potential for advanced manufacturing in Israel. Some 30% of industrial multinationals that operate R&D centres in Israel also choose to co-locate manufacturing activity.”

During Israel’s FDI surge of the last 18 month, the vast majority of capital (68%) has come from the US, Israel’s primary political, economic and military ally.

“Israel is proud of its strong business ties with the US. Nevertheless, we are also working hard on diversifying,” said Mr Cohen. “First, we are looking towards Asia. Second, we are looking for more investments from Europe, which is a leader in traditional industries and as such is keen to benefit from the Israeli experience in tech, while sharing its industrial knowhow with Israel.”

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